Former FTX US chief denies involvement in company scam

Brett Harrison, the former head of the US division of FTX, has distanced himself from the cryptocurrency exchange co-founded by Sam Bankman-Fried, which filed for bankruptcy back in November.

Harrison, who stepped down as president of FTX US in September, wrote about his experience with the company in a 49-part Twitter thread posted Tuesday. Harrison rarely made any public comments about FTX and largely remained silent when the digital asset company collapsed this fall.

Harrison said he was not aware of or involved in the FTX “criminal scheme” that he said Bankman-Fried, a former FTX chief executive, was watching along with the disgraced founder’s inner circle.

Bankman-Fried is accused of embezzling billions of dollars in FTX customer funds to support risky bets at hedge fund subsidiary Alameda Research in what prosecutors say may be one of the most brazen fraud cases in recent years. He pleaded not guilty to all eight counts he faced in the Southern District of New York and was under house arrest at his parents’ California home on $250 million bail.

Before his arrest last month, Bankman-Freed publicly stated that he never intended to deceive anyone.

Harrison did not mention in his latest tweets whether he is cooperating with any prosecutors or regulators.

Unlike other FTX executives, Harrison had a traditional financial pedigree, having worked at several financial stores. He was once Head of Trading Systems Technology at Jane Street and led the ETF Technology Team at Citadel Securities.

Harrison said he left FTX.US last year as his relationship with Bankman-Fried soured after months of disputes over management practices. Harrison said he called for a responsible hiring policy, transparent communication between Bankman-Fried and FTX’s U.S. leadership, and the hiring of more experienced employees for the platform’s leadership positions.

Harrison said he wrote a formal complaint about FTX’s biggest organizational issues in April 2022 but feared being fired.

“I raised concerns within the company, believing that the managerial and organizational challenges I faced were typical of growing startups, and that my role as an experienced CFO was to correct them and usher in the next phase of growth for the company. Harrison wrote.

“I never could have imagined that such problems — which I have seen in other more mature firms in my career and considered not fatal to business success — were based on a multi-billion dollar fraud,” Harrison wrote.

Harrison says he met Bankman-Freed while they were both working for Jane Street, and he came across the latter as “a conscientious junior trader” and “a sensitive and intellectually curious person who cared about animals.” However, Harrison said that in an early conflict at FTX with Bankman-Freed, he saw “his complete insecurity and intransigence when his decisions were questioned, his spitefulness and the fickleness of his temperament.”

“I realized that he was not who I remembered,” Harrison wrote.

Prosecutors allege that FTX was fraudulent from the start, with Bankman-Fried allegedly transferring customer deposits to Alameda. Bankman-Fried treated the money as his personal piggy bank, prosecutors said, also using it to fund a luxurious lifestyle for himself and a group of friends and executives.

Bankman-Fried did not respond to a request for comment for this article.

In a Bloomberg commentary on Harrison’s Twitter statements, Bankman-Fried said that “Brett was a great developer and had a deep understanding of the FTX product.”

“While I strongly disagree with much of what he said, I have no desire to enter into a public argument with him, and I do not feel that it is my business to publicly challenge his work unless he allows me to do so. ”, — quotes Bankman-Fried Bloomberg.

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